Research

NVDA – Market expectations are for Uniform ROA expansion, but management has concerns about demand and performance sustainability

  • NVIDIA Corporation (NVDA:USA) currently trades above recent averages relative to UAFRS-based (Uniform) Earnings, with a 29.1x Uniform P/E. At these levels, the market is pricing in bullish expectations for the firm, however management has concerns about demand and performance sustainability
  • Specifically, management may lack confidence in their ability to sustain elevated revenue, net income and EPS levels. Also, they may lack confidence in the sustainability of demand growth for data centers and in their ability to maintain growth across their platforms. Furthermore, they may be concerned about the complexity of inference and about their inventory levels. Finally, they appear to be exaggerating the performance of their Turing graphics processing unit